if you enter into an IVA maintaining payments to your creditors, it would demonstrate them that you are committed to repay your debts and are not afraid to get blinded in a legal arrangement. What it means for them is that they are allowing you to pay back a percentage of the debt and the best thing about it is that it is with their approval. Making a proposal of an IVA gives the creditor a clear view of what it is going to cost them if they approve the IVA rather than force you into bankruptcy. Since the cost and fees of an IVA is generally less than bankruptcy; the return for the creditors in an IVA is better than bankruptcy.
Like any financial instrument in the market, IVA has its own advantage and disadvantages.
Advantages of an individual voluntary arrangement (IVA)
There no social stigmas attached to an IVA. An IVA is a private affair, therefore your family and friends wouldn't find out about it. Unlike bankruptcy and either allows you to carry on with your life how you would.
You become completely debt free after your IVA is completed
As opposed to bankruptcy IVA safeguards you from losing a home.
An individual under the agreement off IVA can continue to have a current account
IVA can get you debt free within five years
It is possible to write off up to 75% off your debt
With an IVA you pay back what you can afford
Your debtors are not allowed to contact you
An IVA will provide you protection from court action
An IVA will stop your creditors from making any further demands
At the end of the completion of your IVA, your credit rating will significantly improve
One off the major advantage of an IVA is your name with not appear in the local newspaper. Whereas in bankruptcy this is a requirement
If you are a business owner, you can continue to trade whilst being in an IVA
with an IVA there are no publicity
In an IVA you have more say about what assets you want to make it available to your creditors
An IVA will allow you to continue work in the financial sector, police Force or the armed forces. Whereas in bankruptcy you are not allowed to do so
In a bankruptcy you are not allowed to continue to be a company director, but with individual voluntary arrangement you are allowed to do so
In individual voluntary arrangement there are no professional disqualifications
If you hold a public office position in your job, you can continue to do so whilst being in an individual voluntary arrangement
Cost of IVA is lower than bankruptcy
With an individual voluntary arrangement you can keep your assets
creditors usually prefer either it's because it will allow them to claim tax relief against any bad debts
Creditors who do not vote for an IVA are still bound by the individual voluntary arrangement as long as you receive 75% of the vote. they are bound by the law
If you have received 75% vote, and your individual voluntary arrangement has been approved, creditors voted against that IVA still bound by the law
In an individual voluntary arrangement they are less restrictions compare to bankruptcy
Disadvantages of individual voluntary arrangement (IVA)
Individual voluntary arrangement is longer than bankruptcy. IVA Takes up to five years, comparing to bankruptcy which takes only one year
An individual voluntary arrangement is recorded in the individual insolvency register, this is searchable by the public if they want to look at it
In an individual monitoring shouldn't you are not allowed to leave out any creditors. If you do so they are allowed to pursue their credit even if you are in the arrangement
Your insolvency practitioner with a monitor your payslips, any update to your salary, or any increase in income. If you start to earn more than what you were while proposing the arrangement, you will be paying more words your IVA
in some circumstances individual voluntary arrangement would last for six years instead of five
If necessary your insolvency practitioner may ask you to release some of the equity of your property, this is to ensure so the creditors up more likely to agree to the arrangement.
If you have debts less than £15,000 and less than three creditors you cannot propose an IVA
after your expenses you must be able to pay at least £200 per month
Although an IVA is a great deal to help you pay back your debts, it does however lock you into an arrangement which lasts up to 5 years
a person who enters an IVA can not get any further unsecured loans or borrowings
an IVA can show up on your credit report for up to 6 years
if a person feels to keep the agreement of an IVA, here she will be made bankrupt
an IVA is legally binding, which means you are not allowed to leave it
It’s a criminal offence to lie in the process of arranging your individual voluntary arrangement.
Why use us to set up your IVA?
If you have debts over £15,000 than our Insolvency Practitioners can help you by proposing an IVA plan for you. Our Practitioners are industry regulated with many years experience in dealing with people like yourselves. We believe in providing honest, professional and reliable service. Fill out our online no obligation enquiry form to arrange a callback from one of our specialist Insolvency Practitioners. They will be happy to listen to you and devise a plan that is best suitable for your situation.
